Background

HE Group Bhd (HEGROUP) is principally involved in the provision of power distribution systems, other building systems and works, the hook-up and retrofitting of electrical equipment, and trading.

IPO Statistic

The IPO entails a public issue of 130.1mn new ordinary shares and offer for sale of 44.0mn existing shares at an IPO price of RM0.28/share, which account for 29.7% of the group’s enlarged issued share capital.

Public Issue:

• 22,000,000 new shares for application by the Malaysian public;

• 11,000,000 new shares for application by eligible parties; and

• 53,889,700 new shares for private placement to selected investors.

Main Competitive Advantages

1. Strong track record and capabilities in power distribution systems;

2. Key clientele from growth industries; and

3. Strong outstanding orderbook and tender book in the pipeline.

Valuation

At an IPO price of RM0.28/share, HEGROUP is priced at a trailing PER of 12x annualised FY23 core EPS of 3.5sen. We value the company at 9x CY25 EPS, arriving at a fair value of RM0.44/share. Not Rated.

Source: TA Research - 17 Jan 2024